This article was displayed on the ChosunBiz MoneyMove (MM) site at 9:21 a.m. on Sept. 8, 2026.
As the steel industry slump drags on, small and midsize steel companies are filing for court receivership one after another. Most companies that have entered receivership say they will first push for business normalization through their own self-rescue plans, but if the downturn continues, they could be put up for sale. Some are already looking for buyers.
According to investment banks (IB) and the steel industry on the 8th, steel manufacturers Busan Steel and Boseong Steel are currently under receivership and are pursuing business normalization. Both companies are not pushing for a sale of management control at this time. They are prioritizing normalizing the companies through self-rescue measures such as asset disposals and expense cuts.
Steel manufacturer Jinyoung S-Tech also entered receivership on the 8th of last month. It is understood to be working on normalization, including appointing a chief restructuring officer (CRO). A CRO reviews a rehabilitating company's cash position and business viability and prepares a plan to restore normal operations.
Receivership does not automatically lead to mergers and acquisitions (M&A). Kosteel has been under receivership since last year but did not sell the entire company. Instead, it pursued normalization by closing plants and restructuring its business, and the receivership ended on May 8.
However, self-rescue plans alone are often not enough. Pipe maker Daewon S&P received a court decision in Nov. last year to terminate its receivership. If a rehabilitating company fails to normalize on its own and cannot find a new investor, receivership is typically terminated and the company is likely to move toward liquidation.
Weak domestic demand over a long period is behind the mounting restructuring pressure on steelmakers. According to the POSCO Research Institute, domestic steel demand last year was 43.59 million tons, the lowest in 23 years. The prolonged slump in construction and a slowdown in manufacturing, including autos, are to blame.
Demand has partly rebounded this year, but some say it is hard to see it as a clear recovery. Domestic steel demand rose 3.2% in January–April from a year earlier. However, the POSCO Research Institute projected that even in 2026–2027, annual steel demand would struggle to recover to around 45 million tons. In particular, rebar and pipe makers, which are highly sensitive to construction cycles, are under heavy strain.
Oversupply from China is also hurting the profitability of Korean steelmakers. With weak domestic demand in China, local steel companies are exporting in large volumes, forcing Korean firms to compete on price with low-cost imports. Stronger U.S. protectionism is also making exports harder. The United States is imposing high tariffs on steel products under Section 232 of the Trade Expansion Act. Tariffs of up to 50% remain in place on Chapter 72 steel and Chapter 73 industrial steel products.
Industry officials believe that if the downturn persists, steelmakers could come on the market. Some companies are said to be attempting restructuring first to keep operating even though self-rehabilitation is difficult. If steel demand does not recover, companies with limited financial capacity may consider attracting outside investment or selling management control.
Some steelmakers are already on the block. Mid-sized Jeongan Steel is pursuing a sale during its receivership. It is negotiating acquisition terms with some bidders and is said to be set to sign a conditional investment agreement soon. The price discussed in the market is 70 billion–80 billion won. Jeongan Steel's liquidation value is estimated at about 69 billion won.
Founded in 1989, Jeongan Steel manufactures and processes pipes and steel sheets. Sales fell from 240.3 billion won in 2022 to 227.1 billion won in 2024. Over the same period, the liability ratio rose from 159.1% to 203.7%. Net income of 1.5 billion won in 2023 swung to a net loss of 3.1 billion won last year.
Industry officials also say that if the steel slump lasts longer, companies pursuing internal restructuring could additionally appear in the M&A market. An IB industry official said, "If a company cannot carry out repayments under a court-approved rehabilitation plan, it is common to move beyond asset sales and pursue M&A."